Mad About The 1% Richest Americans? The 0.01% Are Really Making The Swindle, Says The Economist

Famed economist Thomas Piketty makes several controversial arguments in his book Capital In the 21st Century, many of which have been attacked heavily over the last year. One of his primary claims is that economic mobility has decreased substantially over the last few hundreds years, but that stands in stark contrast to many studies which illustrate the opposite, according to The Economist.

“Earlier studies of American wealth have tended to show only small increases in inequality in recent decades. A 2004 study of estate-tax data by Wojciech Kopczuk of Columbia University and Emmanuel Saez of the University of California, Berkeley, found an almost imperceptible rise in the share of wealth held by the top 1% of families, from about 19% in 1976 to 21% in 2000. A more recent investigation of the Federal Reserve’s data on consumer finances, by Edward Wolff of New York University showed a continued but gentle increase in inequality into the 2000s.”

But it’s not just modern times that are experiencing a less intense spreading of the wealth toward the 1% than before. The Economist cites other statistics that indicate the trend has actually been quite positive over the last century in the United States.

“Because the bottom half of all families almost always has no net wealth, the share of wealth held by the bottom 90% is an effective measure of “middle class” wealth, or that held by those from the 50th to the 90th percentile. In the late 1920s the bottom 90% held just 16% of America’s wealth—considerably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929. From the beginning of the Depression until the end of the second world war, the middle class’s share of total wealth rose steadily, thanks largely to collapsing wealth among richer households.”

That’s not to say that the magazine thinks that the super rich haven’t made gains in wealth. In fact, The Economist also presented other evidence that shows that the most wealthy — the 0.01% in fact — now actually control more of wealth than any other group — 22% of Americans’ total wealth.

“On the other side of the spectrum, the fortunes of the wealthy have grown, especially at the very top. The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealth—back to the 1916 share, which is the highest on record. Those down the distribution have not done quite so well: the top 0.1% (consisting of 160,000 families worth $73m on average) hold 22% of America’s wealth, just shy of the 1929 peak—and exactly the same share as the bottom 90% of the population. Meanwhile the share of wealth held by families from the 90th to the 99th percentile has actually fallen over the last decade, though not by as much as the net worth of the bottom 90%.”

Do you side with The Economist or Thomas Piketty on the richest 1% of Americans?

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